By Allan Maurer
FRANKLIN, TN—Way back in 1995, Dan Proctor, founder of Passport Health Communications Inc. told Jim Lackey, now chair and CEO of the company, “The Internet is going to change everything and healthcare could really use it.”
Passport Health Communications is one of the innovative companies presenting at the Second Annual Southeast Venture Conference at Tysons Corner, VA, Feb. 27-28 (for more information on the conference, see: www.seventure.org).
Proctor, who previously founded Specialized Computer Systems, a physician practice management software company, created his first electronic claim submission product for his father, a practicing doctor, in 1980.
He told Lackey, who has 25 years of healthcare experience with HealthAmerica Corp., Coventry Corp, and Focus Healthcare Management, that the Internet could help resolve payment problems between health care providers and insurers.
The problem, Lackey explains, is that when a patient enters a doctor’s office or hospital, they need to know what insurance the patient has, the details of coverage, and other information. In 1995 and 1996, they usually picked up a phone and called the insurance company. They would get put on hold until eventually reaching someone who could confirm the patient’s coverage.”
On track for $45M revenue
Passport’s concept, he explains, was that, “If we could tie into insurance data on our side and make it available to hospitals and doctors through a Web portal, customers would come to us. A user keys in the patient’s insurance number, we access the data, which comes back in seconds. That’s how we still make money.”
The company, founded in 1996 raised about $20 million in angel and venture money with rounds in 1999 and 2002. Then in 2005, it did a leveraged recapitalization at a high valuation, taking $70 million in about half equity and half debt financing. Part of that returned money to original investors.
The company did about $37 million in 2007 revenue with $11 million EBITA. It expects to do $45 million and $15 million respectively this year. It has about 180 employees and regional offices throughout the United States.
Lackey says the company is spending a good bit of time on due diligence for acquisitions and is looking at two right now.
Passport has added numerous tools to its Web tool so that its clients can accept checks, debit or credit cards, address corrections, and fraud detection.
Another of its products works directly with existing systems of large hospitals. “Our system sits on top of theirs, finds the needed information and puts it back into the legacy system,” Lackey says.
It’s working on another that would tell patients with Health Savings Accounts up front how much a given procedure would cost them. “In the past, they often didn’t care because the insurance company paid,” says Lackey. “Now, writing a check or using a debit card, they want to know how much it costs.”
Passport provides its solution to more than 1,500 hospitals and 2,500 physician clinics and outpatient centers. Its clients include large medical centers such as Geisinger in Pennsylvania, Akron General, and Vanderbilt Medical Group, Nashville.
On the Web: www.passporthealth.com
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